DA Davidson cuts Northwest Pipe target to $55, maintains Buy

On Friday, DA Davidson adjusted its price target on Northwest Pipe Company (NASDAQ:NWPX) shares, reducing it to $55.00 from the previous $57.00, while reiterating a Buy rating. The firm’s analyst Brent E. Thielman commented on the adjustment, attributing the change to "tariff noise" that affected the first half of the year but maintaining a positive outlook on the company’s demand and growth potential. According to InvestingPro data, NWPX currently trades at an attractive P/E ratio of 13x, with the stock showing signs of being undervalued based on its Fair Value analysis.

The revised price target is based on 9 times the firm’s 2025 EBITDA estimates and 7 times its 2026 estimates, which correlates to 17 times and 14 times the 2025 and 2026 EPS estimates, respectively. Despite the tariff-related disruptions in the first quarter and first half, Thielman emphasized that the overall bid activity and demand for Northwest Pipe Company’s products remain solid and are considered more significant indicators of the company’s future performance. InvestingPro analysis reveals strong fundamentals with a current ratio of 3.49, indicating excellent liquidity, and a robust financial health score rated as "GOOD."

Thielman also noted that Northwest Pipe Company, which has recently undergone rebranding to ’NWPX Infrastructure’, is working towards achieving a revenue potential of $100 million from each of its Precast subsidiaries beyond 2026, totaling $200 million collectively. This goal may be further supported by strategic acquisitions, as the company continues to actively seek opportunities. With a net leverage of 0.5 times trailing twelve-month EBITDA, significantly lower than its long-term target of 2.0 times, and $113 million in available liquidity from cash and credit facilities, Northwest Pipe Company is positioned for positive cash generation in 2025.

The analyst praised the leadership team at Northwest Pipe Company for their successful execution of a strategic plan, which has included accretive mergers and acquisitions in recent years. Thielman highlighted the company’s attractive growth story, combining organic and inorganic opportunities, and noted that it is currently trading at a relatively modest 12 times EPS and 7 times EBITDA. The reaffirmed Buy rating reflects DA Davidson’s ongoing confidence in the company’s prospects. InvestingPro data supports this outlook, showing revenue growth of 10.85% in the last twelve months and positive net income of $34.21 million. Investors seeking detailed analysis can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers, which provides in-depth insights into NWPX’s valuation and growth prospects.

In other recent news, Northwest Pipe Company reported mixed financial results for the first quarter of 2025. The company missed earnings per share (EPS) expectations, posting $0.39 against the forecasted $0.48. However, it exceeded revenue projections with $116.1 million, surpassing the expected $113.5 million. Despite this revenue beat, the company faced a 6.42% decline in stock value, reflecting investor concerns over the EPS miss and operational challenges. The Precast segment saw a 13.4% increase in sales, while the Steel Pressure Pipe segment experienced a 2% decline. Analysts from D.A. Davidson and Northland Securities discussed the impact of new trade policies and tariffs, which had negatively affected the company’s performance in the first quarter. Northwest Pipe anticipates strong bidding activity in the coming quarters and aims to achieve a $100 million revenue rate for its Geneva and Park businesses by the end of 2026. The company is also focusing on strategic acquisitions within the Precast space to accelerate growth.

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